Alliance cooperation joint ATM network: exploring the banking sector in Indonesia

Purpose – This study aims to determine the factors that encourage Indonesian banks to collaborate in the
banking networks ATMPrima and ATMBersama to achieve business efficiencies.
Design/methodology/approach – A combination of methods is used to collect both qualitative and
quantitative data. Factor analysis and different testing technics are used. The data were obtained through
interviews withmanagers of the banks involved in the two banking networks included in this study.
Findings – This research addresses ATM banking from three perspectives: banks that collaborate in ATM
networks, banks that are joint ATM providers and banking customers that use ATMs. The results show that
the banks in the study are more concerned about cost-effectiveness and cost-efficiencies in both the
operational and investment aspects of supporting their ATM infrastructures. ATM providers place more
importance on creating the most user-friendly, stable, wide-ranging and continuous system of services by
collaborating with other banks in networks that provide ATM services. Customers put more importance on
paying the minimum possible administration fees and the availability of specific banking services across a
wide area.
Research limitations/implications – This research took place over a period of only one year. This
limited the depth of the data collected. A longer study using data that cover more than one fiscal year would
have generated more detailed information.
Practical implications – This study places importance on maximizing cost-efficiencies to keep bank fees
low for customers. There are significant investment and operational costs associated with setting up and
operating ATMs and of adding and managing additional ATMs. This is particularly so in an era when their
use is on the decline owing to the increasing use of electronic banking.
Social implications – The social implications of ATM banking refer to the reduced administration fees
customers pay as banks incur cost savings from collaborating on infrastructure and services. The availability
of ATMs from specific banks could be replaced by one joint ATM machine that is situated in a specific area
where electronic banking is not available. Banks’ customers tend to move to other banking services, and this
means banks could lose a lot of their existing customers unless they can come up with unique services that are
both accessible and user-friendly.